Let's not gloat over predicting a market crash !!

[mathjak107]

if you are going to predict , then predict often .

[bmw335xi]

If I say the market will crash every month, eventually I will be right, even though the market could still be way up at the bottom of the crash when I initially started guessing a crash. Seriously, this is why you have idiots marching against Wall Street because there are a lot of ________ people out there.

[iskerbibel]

Originally Posted by Back to NE

I hesitate to write this but feel I must. I think there are 2 types of people who want to see the stock market plunge as low as possible: a) people with no savings/investments who are running on sour grapes -- I don't care about them; b) people on the right who think Democrat presidents (Obama, Hillary) are the worst things on earth and think a depressed stock market will get Trump, Cruz or another Republican elected.

Group b worries me because it might be possible for a critical mass of republican investors to temporarily pull out of stocks to cause an ugly crash. We know Wall Street is acclimated to the right so this push could come from financial institutions and not just individual investors.

I really hope I am being paranoid. Comments welcome, I'll hold on to my seat.

I think a case could be made that your scenario with 'group b' is what finally tipped the balance in 2008. Of course there were plenty of underlying problems- but it wouldn't be the first time that political sour grapes have had a ripple effect.

Personally I'm waiting for the market to start riding high again. If we get back into the neighborhood of 18,000 on the DJIA, I'll pull some money out and buy back in with the post-election tantrum.

[richrf]

Originally Posted by iskerbibel

Yeah, I was reading a different article about the same prediction this morning. Here's a point that I think should be noted:



Analyst: Here Comes the Biggest Stock Market Crash in a Generation - Fortune

Albert Edwards is pointing out the tremendous amount of misallocation of capital which is the result of Free Money for Billionaires policies.

It is everywhere and it is impossible to predict where it will end.

Whether it be the U.S. shale oil industry or the empty factory cities in China, we now have a catastrophic glut of non-performing industries that have to be continually financed by cheap money and naive investors (the Banks and financial composites won't hold this junk on their books).

So, the Fed will hold interest rates low hoping that more and more unsuspecting investors will pour money into these junk, overbuilt industries - exactly as they did during the last housing crisis but a magnitude larger.

The reason the market is going down in what is probably a secular Bear Market is because the larger institutions are dumping their stocks (in a slow and methodical manner) still that they can collect their profits. The likely Bear Market is left for others to endure.

Of course, the Central Banks may try to throw $20 trillion more into the economy to try to save the stock market. But to what end? Create a world economy where everyone doesn't work and just lives of illusory stock market wealth?. Or maybe to build more shale oil wells or more factories in China as demand collapses?

Just as the collapse of the housing industry created enormous financial dislocation so will (is) this collapse. You don't know about it yet because as with the housing bubble, the media doesn't say anything until the collapse occurs. It is simply to complicated and people aren't interested. A rising stock market is what people like to talk about. It's fun.

[iskerbibel]

Originally Posted by richrf

Albert Edwards is pointing out the tremendous amount of misallocation of capital which is the result of Free Money for Billionaires policies.

It is everywhere and it is impossible to predict where it will end.

Whether it be the U.S. shale oil industry or the empty factory cities in China, we now have a catastrophic glut of non-performing industries that have to be continually financed by cheap money and naive investors (the Banks and financial composites won't hold this junk on their books).

So, the Fed will hold interest rates low hoping that more and more unsuspecting investors will pour money into these junk, overbuilt industries - exactly as they did during the last housing crisis but a magnitude larger.

The reason the market is going down in what is probably a secular Bear Market is because the larger institutions are dumping their stocks (in a slow and methodical manner) still that they can collect their profits. The likely Bear Market is left for others to endure.

Of course, the Central Banks may try to throw $20 trillion more into the economy to try to save the stock market. But to what end? Create a world economy where everyone doesn't work and just lives of illusory stock market wealth?. Or maybe to build more shale oil wells or more factories in China as demand collapses?

Just as the collapse of the housing industry created enormous financial dislocation so will (is) this collapse. You don't know about it yet because as with the housing bubble, the media doesn't say anything until the collapse occurs. It is simply to complicated and people aren't interested. A rising stock market is what people like to talk about. It's fun.

Anybody can predict a crash. Lots of people saw the housing bubble coming years in advance... myself included. But that prediction is of very little value when the timing can be wrong by YEARS and the specifics of how it'll play out are anybody's guess.

History is littered with doomer predictions that were off by years or never happened at all. But it's different this time?

[richrf]

Originally Posted by iskerbibel

Anybody can predict a crash. Lots of people saw the housing bubble coming years in advance... myself included. But that prediction is of very little value when the timing can be wrong by YEARS and the specifics of how it'll play out are anybody's guess.

History is littered with doomer predictions that were off by years or never happened at all. But it's different this time?

This is not about a silly stock market, though that is what gets the headlines.

It is about the economic lives of billions of people. For most it's not about a cushy retirement nest egg, it's about survival. And when billions of people (those who couldn't give a heck about the NYSE) are thrown in deep despair, very nasty things happen everywhere.

Economics is about living - not some little stock market which only affects maybe 10% of the people in the U.S. and a tiny fraction of that worldwide.

But it's only when people lose their jobs for years or even decades do they understand what an economy and building for the future is really all about.